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Interview

with Peter Ramsey, Managing Director, GLP Group

14.04.2011 / Energyboardroom

The present is a very exciting time for your company with the recent opening of the Westbury micro LNG plant in Tasmania – Australia’s first. It is therefore fitting to first explore the origins of your company to understand its present positioning and success thus far. When first starting GLP in 1998 how did you seek to distinguish yourself from other companies operating in the market?

All I wanted to do in this country was produce facilities and service our customers in a more friendly and professional manner than what I had seen in the past. Having worked on the technical side of this industry since 1982 I could see that the market needed a much more responsive and personal service to the individual. I was able to bring lots of success to the two previous companies I had worked for and was looking to replicate that when founding GLP in 1998. Like any good start-up we began with nothing, not even money in the bank, and worked from the back of a house. The business eventually grew on its own.

It was not until 2002 that my eyes opened up to the idea of building process plants with more efficiencies so that customers would encounter fewer problems than in the past. Achieving that meant carefully hiring the right people. We started off small but given the knowledge that I accumulated through the years I knew that I just needed to get a good team together. After we had built several process plants I realized that our customers were very happy. A problem here in Australia is that unless customers know you, they will tend to first look to import equipment. But once they realized our quality of service at a reasonable price we started to get repeat business. The word rapidly spread soon after that GLP was a reliable company that can do excellent work from a design, fabrication, and delivery point of view with a lot of care and attention.

My initial vision in 2002 was to move into larger projects in alternative energy and the environmental side of the business once our team of good people was assembled. However, with the picture being drawn up about the energy boom we quickly got involved with natural gas processing.

Perhaps for the immediate future GLP’s name will inevitably be linked to the Westbury micro LNG plant in Tasmania. Preceding that, what was the flagship project that helped this company reach critical mass?

We worked on a C02 recovery plant from Flu gas in Queensland which was the first one of its kind in Australia. The beauty of that plant was that its materials, solvents, and technologies were all environmentally friendly.

We were engaged by a consultant to look at different processes for CO2 recovery. This company was buying in CO2 for blanketing purposes. Someone had a vision that, since they were producing a lot of CO2, why not capture it, liquefy it, and use it in the production process? It ended up being an economic decision by BHP Billiton to do something good for the environment. So we built the first plant of this kind. There were other earlier technologies that rivaled this design; however they utilised unenvironmentally friendly solvents. Our technology was pioneering in this application and was the first of its kind in the world. All the project stakeholders took a risk to proceed with building the plant – GLP included. Ultimately the project was a success and I saw a clear vision to grow the company further.

What were your initial impressions of the micro LNG plant when first proposed with the idea of designing and constructing it? What were the standards that you were measuring yourself against having never done this before?

Initially BOC was looking to import units from overseas but still interviewed us nevertheless. We did a major presentation in front of people from all over the world. BOC was very happy with our approach. They recognized that they could work with us as a partner and ultimately approved GLP to build their first micro LNG plant.

Micro LNG consists of a whole set of units of operation, all of which we have done before. I was therefore able to put things collectively together in a streamlined plant to produce LNG for BOC. Cost was also a massive factor for awarding us the contract. GLP was able to design, build and commission the Westbury Micro LNG Plant for the most economical price with the greatest engineering flexibility.

The major barrier to LNG becoming a prevalent transport fuel is the absence of an expansive distribution network, suggesting that the liquefaction technology is all proven. What, therefore, was the learning curve that you encountered with tried and test technology?

The technology is all proven indeed. Our responsibility was to bring a clean, dry, and usable gas to BOC/Linde’s liquefying phase. We designed the plant for 50 tons per day of output but in recent runs it has been pushed up to 55 tons per day. Furthermore, while we expected the commissioning phase to last several months, successful commissioning only took three weeks. This can be attributed to our optimized process plant design and careful quality control during construction.

The project development phase was extensive as both BOC and GLP had to learn and develop technologies for the project. BOC did not have a defined scope on how they wanted the plant located so we were designing on the run. Creating various 3D models and adjusting the plant introduced a certain element of risk. Eventually we had to commission the plant to fully integrate it with BOC’s liquefying technologies and ensure that it produced the LNG.

What do you believe is the trend that you have set with micro LNG in Australia? How do you see micro LNG unfolding in terms of other regions this application can spread to and new competitors that will follow suit?

At the moment micro LNG is for long haul transport applications. The new LNG facilities that will be built will be able to service any commercial transport that consumes fuel. We all know that there are limited sources of hydrocarbon fuels in terms of diesel and petroleum products. The diesel market in particular will rapidly dry up in 5-10 years especially if India and China continue raped energy consumption growth. The mining sector sees the benefit to convert from diesel to LNG with the idea of having a central LNG processing facility that links to satellite stations for fuel dispatch.; I believe that this is where the micro LNG market is headed in the future for Australia.

For countries that cannot afford to build extensive gas pipeline networks, it is much cheaper to build a central micro LNG processing facility and distribute the LNG by tanker trucks, , and get those areas to convert their transport to LNG.

Why can’t micro LNG to the tune of 50 tons per day of output be scaled up to a macro level? Wouldn’t that help Australia address its exacerbating trade deficit in liquid fuels?

When designing a plant of a macro size, the transport of that liquid internally in the plant is a very large task. To modify the plant and distribute from a mega source down to a facility that can only look after 100 kilometer radius is uneconomical. Micro LNG plants are designed to tap into existing gas networks and to be built cheaply enough in order to supply the local area. When building a mega facility like in Gladstone or Darwin and transporting the offtake to large container ships, the fuel is so cheaply priced but the quantities are so large that it justifies the massive plant size. If you start transporting LNG by trucks to destinations over 500km away then it becomes uneconomical. Micro LNG plants are controllable in cost and scale.

As I say to people who walk through the LNG facility in Tasmania, it is another Gladstone or Gorgon, but condensed into smaller vessels and heat exchanges. It is also adaptable. We have designed the plant so that it can be reduced or expanded to varying production rates depending on what the market requires. Also, similar to Woodside’s LNG plant in Karratha, the Westbury plant has one train with the possibility of expanding to a second train should that capacity be necessary.

What steps is GLP taking to expand its presence and micro LNG technologies throughout Southeast Asia?

We are establishing ourselves with relevant parties who want to purchase oil and gas facilities and/or build micro LNG plants. This is very much the route that were are taking in Vietnam, the Philippines, and Thailand. We are setting up alliances with people who are interested in building these facilities, be they for government utilities or manufacturers.

What are your main R&D priorities for clean technology that can expand your business and fulfill your original ambitions of environmental stewardship that you had when starting this company?

We are constantly looking at better and more enhanced CO2 recovery methods. GLP does produce CO2 plants for the food industry for which we have already built two and modified a third. As an extension of an LNG facility we have an idea of trying to utilize residual CO2 back into the production process rather than having it be absorbed into another source. We have already done one such case here in Victoria. We designed, engineered, and commissioned a fully finished CO2 plant that comes from offshore natural gas production. If an LNG facility is big enough and has enough CO2, then we can always look at that side of the process.

How attentive are you to the ongoing discussion of a potential carbon price in Australia as it relates to your business?

We will keep going forward irrespective of what the federal government does. Truthfully, it does not really matter to us nor will it affect us. Where people purely want CO2 capture in the non-LNG market we see that as a growing business. Just outside of Gladstone in Queensland GLP is looking at clean coal technology in the form of efficient oxy-burning processes; essentially liquefying and sequestrating CO2 from burnt coal. Hopefully by July or August of this year the oxy-burning process will be commissioned and operating, allowing us to better measure our efficiencies. This $210 million demonstration plant that we are involved in is a different form of carbon capture than what we have done in the past. In that sense we are proud to say that we are heavily involved in two new technologies for CO2 capture in this country.

How would you characterize nature of your conversations with government? What do they describe as the significance of your technology to industry and how do you approach the importance of your role?

I first talked to the government at the opening of the Westbury micro LNG plant. Martin Ferguson, Federal Minister for Resources, Energy, and Tourism, did not know that the design and construction of this facility was done by an Australian company based in Melbourne. He thought that it was all coming from overseas. I told him what we did and how we went about it and he was quite impressed. Minister Ferguson congratulated us and I passed on the congratulations to my staff telling them that it comes directly from a federal energy minister. He had no idea that a small company like Melbourne was getting involved in this. GLP will continue to seek both state and federal government support for development of such technologies in Australia.

What does that say about Australian engineering – is it encouraging or discouraging to be an unsung hero?

You are talking to the owner of a company who likes to work under the radar. I like to say that we are “quiet achievers.” My son is doing a fantastic job of promoting the company and has taken us to a much higher level than where we were in the past.

The resources in this company are fantastic. The technical know-how that we possess brings forth an ambitious attitude to carry out any form of research and innovative work. We also like to keep control of everything that we do. We would struggle to give a good service if we were to go out and build 10 LNG plants. It is better to go out, build a few plants that we exclusively focus on, and continuously receive positive referrals. Many Australian companies are very similar to us in that respect because we operate in a small market.

We hold a closely knit group of good professional people with strong know-how in order to achieve this. My vision for this company is not to be a large engineering contractor that builds 20 plants but has a high staff turnover at the completion of each project

As an Australian company looking to expand its know-how overseas – as opposed to a multinational company adapting and applying its technology in the local context – what do you think “engineered in Australia” has come to mean?

Australian engineering is known for a high level of quality and ingenuity. Our engineers constantly think outside the square for unique, workable and economical solutions. At times it does not have the same impact, , as being advertised as “engineered in America or Germany.” But whenever possible we make reference to the work that we do here. People in the industry know that Westbury in Tasmania is working well and, similarly, we positive references from Santos vouching for the work we do. We can proudly say that what comes from Australia is of high quality. We export certain components overseas and, frankly speaking, the Germans buy our products. People know Australians to have a hard working culture. This is probably because we are isolated and we have to pool our resources together and develop economic engineering solutions ourselves.

Where do you see this company in 5-7 years?

The projected outlook for GLP is very positive especially in the LNG and CO2 capture side of the business. Our turnover will indeed triple over the next five years because of our ongoing conversations with parties who want to expand the LNG market into Southeast Asia. These parties are aware of our capabilities. We are investigating opportunities and developing concepts for another six micro LNG plants. The nature of these talks suggests that this is not just a vision, but an occurring reality.

Ultimately I hope that people recognize GLP as a company that has contributed a significant amount to the sustainable development of the environment and which has created a culture of engineering excellence. Longevity is a key factor for me. We have a long-term approach with this company. Back in 2002 I never thought that we would be so engrossed in building process plants. I am so proud of how the company has constantly evolved. GLP is a great success story and I am very proud of my people.

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